Airbus returns to form

As the world's aerospace industry gathers in Paris for Europe’s premier air show this month, Airbus can "project an image as the more-reliable 'jetmaker', despite the merits of the [Boeing] 777X design" with which the US manufacturer expects to compete against the European company's new Rolls-Royce Trent-powered A350 XWB, according to consultant Richard Aboulafia.

6th Jun 2013

Airbus returns to form

As industry awaits an expected June first flight of the Airbus A350 XWB, European correspondent Ian Goold considers a recent resurgence of interest in the new twin-aisle twinjet.

As the world's aerospace industry gathers in Paris for Europe’s premier air show this month, Airbus can "project an image as the more-reliable 'jetmaker', despite the merits of the [Boeing] 777X design" with which the US manufacturer expects to compete against the European company's new Rolls-Royce Trent-powered A350 XWB, according to consultant Richard Aboulafia.

"The [new model's] success is more than just Airbus taking advantage of Boeing’s misfortunes," he says. Rather, it represents "a return to form for the European [manufacturer], which had lost a decade with its futile pursuit of the tiny 'superjumbo' market", says Aboulafia, who manages commercial- and military-aircraft analysis for the Teal Group consultancy. "After over a dozen years of trying, the 500-seat A380 has garnered just 250 orders. By the end of this year, the much younger A350 programme will have racked up three times that many orders," he notes.

Airbus hopes to certificate the new twin-aisle, twinjet with the A350-900 variant's entry into service in late 2014, followed after two years by the smaller -800 and then the larger -1000 in 2017, says Air Insight consultant Scott Hamilton. In May, as the manufacturer prepared for the A350's first flight, which was expected during June, Airbus had received 616 orders for the A350 family. The latest commitment has come from Middle East carrier Kuwait Airways, taking ten A350-900s (with options on five more) for delivery from 2020. A letter accepting the Airbus tender will be followed by a memorandum of understanding, perhaps at Le Bourget.

In Asia/Pacific, Airbus has been discussing A350-1000 orders with two long-established Boeing operators: All Nippon Airways (ANA) and Japan Airlines (JAL), the latter seen as a prospective customer before October for up to 20 aircraft to replace older Boeing 777s. “A [JAL] A350 order would be a disaster for Boeing,” according to Aboulafia.

“The Boeing-Japanese relationship is the longest and most important global relationship in aerospace history. If they do choose Airbus that would be a vote of no-confidence in Boeing,” says the consultant. In spite of having roughly half of the market in which it competes against Boeing (essentially for aircraft with more than 100 seats), Airbus has less than 5 per cent of related Japanese business.

Elsewhere in Asia, in May SriLankan Airlines provisionally signed for four A350-900s (to replace A330-200s) and six A330-300s to be covered by Airbus finance and operating leases from October 2014. The operator might take additional A350s from another lessor.

Such has been the recently "surging" interest in the A350 (particularly Series 900 and 1000 variants), Airbus is considering whether to set up a second assembly line. “The level of demand we [have seen] would make a very clear business case for an accelerated [production] ramp-up,” says Harald Wilhelm, chief financial officer of parent company European Aeronautic Defence & Space (EADS).

"This is clearly on the radar screen for later this year," according to Wilhelm. "And with such important endorsements [from customers such as lessor Air Lease, British Airways parent International Consolidated Airlines Group, Cathay Pacific, and Qatar Airways] on the A350-1000, we feel encouraged to look into that."

The possibility of a second A350 production line "validates a desire expressed months ago by [Airbus chief operating officer (customers)] John Leahy that he could [sell] more -1000s if he had the capacity to build them", reports Hamilton. "Orders for the -1000 stalled in part because of this, in part because Airbus tweaked the design, in part because Boeing engaged in an effective campaign to cast doubt over the model, and in part because Emirates Airline and Qatar Airways can’t resist negotiating [via] the Press," he explains. Hamilton believes that growing interest in A350-1000s will prompt Airbus to delay introduction of the -800 until 2018 in order to "open slots in 2017 for the -1000 and ease integration pressure for Airbus".

Final Airbus preparations in May for the prospective A350 maiden flight were accompanied by cautious words from EADS executives, who said the programme remained a challenge with a "tough ride" expected during the industrial ramp-up. Airbus had focused on "executing [the first flight], rather than celebrating it," according to Wilhelm. "The key thing is the maturity of [the] first flight. It opens the flight-test campaign," says the official, who notes that "for quite a number of months" Airbus has been operating without any margin to spare in the schedule "but [with] no further drift".

Airbus chief executive Fabrice Bregier agrees, saying in April: “It doesn’t make any difference if [first flight] is before, or just after" the Paris air show. "What counts is to fly [at] around mid-year, because it will support the deliveries in 2014.”

Bregier says that the A350-1000, which Airbus has been marketing "more aggressively [than previously]", could match the Boeing 777-300ER's range but with 25 per cent less fuel consumption. "The ball is now in Boeing’s camp, not in our camp,” according to the Airbus chief executive, who says that Airbus will wait for details of Boeing's 777X offers and guarantees to potential customers before considering any response.

While Boeing is expected to launch the 787-10X at Paris (and the 777X possibly at the Dubai show in November), an A350 first flight in advance of 2013's premier aerospace event would bring "a huge credibility boost for Airbus just as people are having doubts about Boeing’s execution”, according to Aboulafia. Such a flight could snowball, boosting A350-1000 orders as Boeing seeks to book business with the competing 777X, which will offer new larger composite wings and new GE9X engines.

"Fortunately, Boeing has a very promising response [in] the 353- to 407-seat 777X family", notes Aboulafia, who says that Airbus has “played it straight” with the A350 by not announcing unachievable milestones. “Having the A350 fly [before] the show would be great from a prestige point of view. But they’ll only do it if they’re really comfortable. They’re not going to be pushed.”
Compared with Boeing's "game-changing" claims for the much-troubled 787 programme, the Airbus A350 "takes a much more conservative approach to systems and structures design, and to industrial arrangements", says Aboulafia. "[At one time,] these traits looked [to be] a disadvantage for Airbus; today, they can be spun as a 'positive'. A well-publicised move earlier this year from lithium-ion [as used on the 787] to nickel-cadmium batteries helps [to] reinforce the message that the A350 means reduced schedule risk."

He sees Boeing’s "series of 787 programme disasters" as presenting to Airbus "a gift that will keep on giving for years". Meanwhile, the Teal Group analyst concludes that strong commercial demand for the A350, "plus very strong up-front orders for the new A320 Neo series, will translate to positive momentum for EADS/Airbus over next few years at least."

Despite industry speculation to the contrary, Air Insight's Hamilton believes Airbus will not drop the A350-800 smaller variant, which would "totally cede the 'middle-twin-aisle' sector to the 787" at a time when an A330 replacement must be considered. Airbus also needs to "address the absence of a competitor to the 777-9X [and] the absence of a new-technology competitor to the 787-8".